Kia aims to win US market share as tariffs force rivals to pull back
Kia, which together with affiliate Hyundai Motor (005380.KS), opens new tab ranks as the world's no. 3 carmaker, said its operating profit in the second quarter slumped by a quarter as it took a hit of 786 billion won ($570 million) from U.S. tariffs and warned of a bigger blow in the second half.
Still, it increased April-June U.S. sales by 5% as consumers brought forward some car purchases due to concerns that U.S. tariffs would lead to higher vehicle prices. Kia also credited solid sales of its new Carnival hybrid sport utility vehicles for the rise.
It said it aimed to increase its U.S. sales by 7% to 8% in the second half of the year even as overall auto sales in the U.S. market are expected to slump by 10%, leading to a gain in market share to over 6% from 5.1% in the first half.
It expects Carnival and K4 small car sales to drive the gains while some Japanese automakers are raising prices.
While Kia and Hyundai import about two-thirds sold in the U.S. market, making them more exposed to U.S. tariffs than major rivals, Kia said on Friday that it has not yet made detailed plans to raise prices, instead focusing on growing its U.S. business.
"We believe that we will be able to use the difficult environment as a good opportunity to level up (our market share and sales), and that's Kia's strength," Kia chief financial officer Kim Seung-jun said during a conference call.
Samsung Securities analyst Esther Yim said Kia's strategy to boost sales of hybrids, which are imported from South Korea, could weigh on its profit, but that could be in part offset by Kia's efforts to limit the impact.
To mitigate tariffs' effects, Kia's South Korean factories will divert some of its shipments from the United States to other markets, such as Canada, the carmaker said.
Kia also said its U.S. factory in Georgia aims to shift some electric vehicle production to other vehicles like Sportage, Sorento and Telluride, as the United States is set to end its EV subsidies at the end of September.
Kia shares were down 0.9%.
($1 = 1,378.0800 won)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
17 minutes ago
- Reuters
India's April-June finished steel imports fall nearly 30% as China, Japan shipments slow
NEW DELHI, July 29 (Reuters) - India's finished steel imports dropped nearly 30% in the first three months of the financial year that started in April, due to a persistent fall in shipments from China and Japan, according to provisional government data reviewed by Reuters on Tuesday. The world's second-biggest crude steel producer imported 1.4 million metric tons of finished steel during April-June, down 28.8% from a year earlier, the data showed. Shipments from China fell 45.8%, while those from Japan declined 65.2%. China shipped 0.3 million tons of finished steel into India during the period, while Japan exported 0.2 million tons, the data showed. In April, India imposed a 12% temporary tariff on some steel imports, locally known as a safeguard duty, to curb a surge in cheap shipments primarily from China. South Korea was the biggest exporter to India, with shipments reaching 0.5 million tons, down 6.5%. India remained a net importer during the period, with exports easing 5.1%. Belgium was the top destination for finished steel exports from India, with shipments rising 40.8%. Shipments to the United States, Spain and Nepal climbed, while exports to Italy dropped. Volume-wise, galvanised plain or corrugated sheets or coils were India's biggest exports. Domestically, crude steel production was at 40.6 million tons, up 11.2%. Finished steel consumption was at 38.3 million tons, up 7.9%. Indian domestic rebar prices edged lower as underlying market sentiment remained weak amid sluggish demand and the onset of monsoon, the government said in its report.
Reuters
18 minutes ago
- Reuters
Bank of Korea board members saw more interest rate cuts necessary, minutes show
SEOUL, July 29 (Reuters) - Board members of South Korea's central bank said there was a need to lower interest rates, citing downward economic pressure from U.S. tariffs, at their latest meeting on July 10, minutes showed on Tuesday. The Bank of Korea kept its benchmark interest rate unchanged at 2.50% at the meeting, but a majority of board members signalled another rate cut in the next three months and warned of "significant" economic uncertainty from U.S. tariffs.
Reuters
20 minutes ago
- Reuters
Bank Millennium beats Q2 forecasts as Swiss mortgage impact wanes
GDANSK, July 29 (Reuters) - Bank Millennium ( opens new tab on Tuesday reported second-quarter net profit of 331.5 million zlotys ($90.1 million), surpassing the 270 million zlotys forecast in a Reuters poll, boosted by a strong performance at its core business. That helped the bank offset higher FX-mortgage costs. Bank Millennium is Poland's seventh-largest lender by total assets and the Polish arm of Portugal's Millennium bcp ( opens new tab. The lender's second-quarter net interest income reached 1.45 billion zlotys, against the average forecast 1.44 billion zlotys from analysts polled by Reuters. Net fee and commission income came in at 188 million zlotys, compared with expectations of 187 million zlotys. The group booked 573 million zlotys in provisions for legal risks related to Swiss franc mortgages. Initially appealing to borrowers in the 2000s due to low interest rates, Swiss franc loans have become a significant burden for the sector as repayment costs surged following the zloty's depreciation and Swiss interest rate hikes. This has led to widespread legal disputes, pressuring Polish banks to offer settlements and book substantial provisions, weighing on their results for years. ($1 = 3.6776 zlotys)
